Performance, Commentary & Portfolio
ISIN GB00BNG2M159 | SEDOL BNG2M15
Fund Manager’s Review
Allianz Technology Trust’s Net Asset Value (NAV) total return was -5.53% in February, compared to the Dow Jones World Technology Index return of -4.2% both in GBP.
Technology shares were broadly lower for the month due in part to President Trump’s often unpredictable agenda and the potential impact as a wide range of tariffs were threatened on regions like China, the European Union, Canada and Mexico, as well as on specific commodities, like Aluminium. While the U.S. Federal Reserve indicated it was in no rush to cut rates, the European Central Bank is expected to continue to reduce borrowing costs. Value-oriented and non-U.S. stocks were among the top performers within the sector for the month, outperforming their high growth and U.S.-based stocks which had led the market over the past several months.
Monthly performance trailed the benchmark as short-term stock selection and allocation impacts offset relative results. Our above-benchmark exposure to the entertainment industry aided results as did bottom-up stockpicking within IT services. This was offset by underperformance within semiconductors, a below-benchmark allocation to technology hardware and exposure to broadline retail.
Contributors
Our below-benchmark allocation to search engine, infrastructure and data analytics application leader Alphabet Inc. aided performance as the stock was lower following moderating revenue growth and higher-than expected capital expenditure plans, which offset growth in the company’s cloud business.
Our active position in commercial free music and audio streaming solutions provider Spotify Technology S.A., contributed to relative performance as the company continues to execute at a high level, posting better-than-expected subscriber growth and notching its first ever annual profit.
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Our expectation is that merger and acquisition activity may continue to rise as capital markets continue to show signs of strength |
Shares of Cloudflare, Inc., a global content delivery network provider, rallied following earnings results, with revenues topping expectations and overcame what was deemed as a fairly conservative guidance, consistent with management’s historical outlook
Our active exposures to cloud-based work management platform monday.com Ltd. and big data and software solutions provider Palantir Technologies Inc. also contributed to relative performance in February.
Detractors
Our structural below-benchmark allocations, given our max position size limitations, to graphics processing and related networking leader NVIDIA Corp. and iPhone and personal computer maker Apple Inc., offset results given their low-single-digit advances and perceived safety relative to the broader market.
Our avoidance of Chinese social networking, gaming and ecommerce provider Tencent Holdings Ltd. detracted from benchmark-relative performance as the company’s share price was buoyed by a renewed interest in Chinese stocks as well as the company’s news it was integrating DeepSeek’s artificial intelligence (AI) model into their WeChat search engine.
Our off-benchmark exposure to online retailer and cloud platform Amazon.com, Inc. and active exposure to social networking platform Reddit, Inc. detracted from results as both companies were lower despite posting upside earnings results.
New buys and sells
Turnover in February was undertaken at a moderate level and impacted by earnings results and market news during the month. We newly purchased shares of SailPoint Inc. an identity security cloud platform, which had its initial public offering (IPO) during the month thanks to leading position in identity governance, one of the fastest growing areas of cybersecurity. We also bought shares of NXP Semiconductors NV and Analog Devices, Inc. given our expectation that the cyclical semiconductor inventory corrections are improving, and we may be at or near the bottom of a chip cycle. These new additions to the portfolio were funded in part via the exit of cloud-based security monitoring and analytics platform Datadog, Inc. given our lower conviction in the company’s ability to deliver sustainable near-term growth.
Outlook
We remain constructive on global technology stocks as the demand backdrop remains healthy, fundamental factors appear intact, and valuation is at a reasonable level relative to growth. Our expectation is that recent volatility in technology companies, amid in part via uncertainty over the Trump administration polices, is likely to subside as markets reassess grandstanding in an effort to focus attention relative to actual policies and their impact on growth.
Investors continue to pay close attention to interest rate levels, with future cuts forecasted which are likely to have an incremental benefit to technology shares. Our expectation is that merger and acquisition activity may continue to rise as capital markets continue to show signs of strength. Amid the volatility, we are opportunistically looking to upgrade select names and add to our highest conviction ideas, to enhance the position of the portfolio and improve performance.
Our focus remains on building the portfolio from a bottom-up perspective with a macro-overview. Technology remains a key enabler across almost every vertical industry, and we will continue to seek stocks which solve difficult problems and can be long-term outperformers. Despite shortterm periods of higher volatility, earnings growth ultimately drives stock prices over the long term, and in our view, we are still early in the spending trend supporting this dynamic segment.
Mike Seidenberg
11 March 2025
This is no recommendation or solicitation to buy or sell any particular security. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.
1.Calculated as 10% of outperformance against the benchmark, after adjusting for changes in share capital and will be capped at 1.75% of the Company’s average daily NAV over the relevant year.
2. As at the Trust’s Financial Year End (31.12.2023). Ongoing Charges (previously Total Expense Ratios) are published annually to show operational expenses, which include the annual management fee, incurred in the running of the company but excluding financing costs.
Registrations |
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Company No. |
03117355 |
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FATCA GIIN No. |
YSYR74.99999.SL.826 |
Codes |
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RIC |
ATT.L |
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SEDOL |
BNG2M15 |
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ISIN |
GB00BNG2M159 |
Awards & Ratings
Investment Week Investment Company of the Year Award 2021 – Specialist category
Allianz Technology Trust won this coveted award in November 2021, having also been a winner in similar categories in 2020, 2019, 2018, 2017 and 2015. This award recognises excellence in closed-ended fund management and highlights ATT’s consistent performance over time. The judging panel was made up of some of the UK’s leading researchers and investors in investment trusts and closed-ended companies, as well as several senior board members with many years’ experience in the industry.
Association of Investment Companies Shareholder Communication Awards 2021
Allianz Technology Trust won the Best Large Trust category, in recognition of its consistent, high achievement. The publication noted that ATT achieved the highest returns among this year’s award-winners (performance measured over three years to 31 January 2020), calling it “a worthy winner of our most prestigious sector award”. This accolade is an independent, statistical and qualitative assessment of ATT’s performance and highlights the Trust’s outperformance both in its class and against its peers.
Shares Awards 2020 – Best Investment Trust
Allianz Technology Trust was pleased to win ‘Best Investment Trust’ in The Shares Awards 2020. The awards were voted by readers of Shares and by the general public, making the award truly representative of the people who invest in the Trust and its peers. In presenting the award, Shares Magazine noted: “The technology sector had been in the ascendancy even before the events of 2020 but the global pandemic has super-charged this trend. We have been even more reliant on tech to tackle the day-to basics of work and home life. Staying in touch through video conferencing, ordering goods and food online and streaming entertainment to keep us entertained at home. Allianz Technology Trust is plugged into these themes and was voted Best Investment Trust in this year’s Shares Awards.”.
Kepler Growth Rating
Kepler Ratings are designed with investment trusts specifically in mind and aim to highlight those which they consider to be ‘best in class’ based on a clear, easy to understand set of quantitative tests. The selection system is entirely quantitative, setting aside all personal biases and views, looking at the universe in a purely objective way.
Morningstar Rating Allianz Technology Trust has a 5 star rating with Morningstar. This is a risk-adjusted, cost-adjusted comparison of fund performance within fund categories. The underlying methodology is robust and accounts for periods of volatility-downward volatility in particular-and also adjusts for fund expenses, including sales charges. That means the more expensive the fund is, the harder it will be for the fund to earn a high star rating.
A ranking, a rating or an award provides no indicator of future performance and is not constant over time.
Morningstar star rating © 2021 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.